Zions Bancorporation (NASDAQ:ZION) Q1 2016 Earnings Conference Call - Final Transcript

Apr 26, 2016 • 05:30 pm ET


Zions Bancorporation (NASDAQ:ZION) Q1 2016 Earnings Conference Call - Final Transcript


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Good day ladies and gentlemen and welcome to the Zions Bancorporation First Quarter 2016 Earnings Webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded.

I would now like to turn the conference call over to James Abbott, Director of investor relations. Please go ahead.

James Abbott

Thank you, Abigail, and good evening. We welcome you to this conference call to discuss our 2016 first-quarter earnings. Our primary participants today will be Harris Simmons, Chairman and Chief Executive Officer; Scott McLean, President and Chief Operating Officer; and Paul Burdiss, Chief Financial Officer.

I would like to remind you that during this call we will be making forward-looking statements, although actual results may differ materially. We encourage you to review the disclaimer in the press release or the slide deck dealing with forward-looking information which applies equally to statements made in this call. A copy of the full earnings release as well as a supplemental slide deck are available at Zionsbancorporation.com. We will be referring to the slides during this call. We intend to limit the length of this call to one hour, which will include a question and answer section. We ask you to limit your questions to one primary and one related follow-up question to enable other participants to ask questions.

With that, I will now turn the time over to Harris Simmons.

Harris Simmons

Thank you very much, James. I want to welcome all of you to our call this afternoon to discuss our first-quarter results. I'm going to talk about some information on the accompanying slides and some opening comments here.

On slide three are some highlights for the quarter. We are pleased with the continued trend of strong increases in pre-provision net revenue, which is the result of solid net interest income growth and adjusted non-interest expense levels that are in line with our stated expense initiatives. Another item that appears to be an emerging trend in the last six months is stronger loan growth. In the first quarter, loans increased at an annualized rate of 7.6%, accelerating from the prior quarter's rate of 5.3%. It was one of the best first-quarter growth rates Zions has posted in last decade. We achieved positive operating leverage for the third consecutive quarter and we are tracking well on the efficiency initiative that we announced last summer with the efficiency ratio falling to 68.5%. Although there will be much discussion about energy lending on this call, which only comprises about 6% of our loan portfolio, the other 94% of our loan portfolio continues of to perform extremely well and energy is a manageable situation for us.

Of note, although the earnings per share only increased $0.01 per share over the prior-year period, the change in the provision for credit losses between those two quarters is equal to about $0.12 per share. So although energy concerns will be with